THE VALUE OF A $10,000 INVESTMENT IN THE OAKMARK GLOBAL FUND FROM ITS INCEPTION (8/4/99) TO PRESENT (12/31/00) AS COMPARED TO THE MSCI WORLD INDEX3
12/31/00 NAV9 $11.31	Total Return Last 3 months*	Average Annual Total Return10 Through 12/31/00 From Fund Inception 8/4/99
The Oakmark Global Fund	5.86%	10.75%7
MSCI World Index w/inc.	-6.19%	0.19%
Lipper Global Fund Index23	-5.43%	8.04%
*Not annualized.

Fellow Shareholders,

The Oakmark Global Fund was up 5.86% for the three-month period ending December 31, 2000. As with last quarter's results, we are pleased with this gain especially when compared to the decline of 6.19% for the MSCI World Index and the 5.43% decline for the Lipper Global Fund Index.

For the calendar year 2000, The Oak-mark Global Fund returned 15.84% compared to declines of 13.18% and 8.50% for the MSCI World Index and the Lipper Global Fund Index respectively. The 15.84%⁷ gain in calendar year 2000 places The Oakmark Global Fund in the top 2% of funds classified by Morningstar²⁴ as World Stock funds. While we are pleased with the past quarter's and year's performance, we look forward to continuing this trend.

My How Things Change

In our quarterly letter last March, we lamented about the soaring stock prices globally in the technology and telecommunication sectors. Since that time, as most everyone is fully aware, the vast majority of these companies have experienced large stock price declines. Many value investors refuse to own technology companies, troubled by the shorter product cycles and less predictable business models. We are continuing to try and take advantage of this sharp market correction by investigating the prospects of many of these fallen stars. As a direct result of this work, your Fund made its first purchase of a pure technology company — Novell, Inc.

Novell is best known for its NetWare — file and print sharing software. However, in 1997, Novell hired Dr. Eric Schmidt (former Chief Technology Officer of Sun Microsystems) as the company's new Chairman and CEO. Immediately upon arriving, Dr. Schmidt began reshaping Novell into an Internet infrastructure company. Many investors became excited about the "new" Novell and drove the stock price from $6.25 to a high of $44.50 last March. As with the whole sector, hype (and the share price) moved far ahead of company fundamentals. Sales of new products did not offset the decline in the traditional packaged software business and as a result revenues declined 8.7% in fiscal year 2000. Wall Street was not pleased: Novell saw their stock price decline from $44.50 to a low price of just under $5.

The fact that Novell has over $3 per share in cash and investments (no debt) and is generating positive cashflow throughout this transition led us to do further work on the company. To us, investors seem to have forgotten what the "new" Novell is becoming and instead have focused on the declining "old" business. We believe Novell has a bright future and with the stock price trading at less than 1.5x our estimate of 2001 EBITDA²⁵, we believe the valuation is very compelling.

Other Portfolio Changes

During the quarter, we sold our First Data position after the stock price had risen over 40% to buy Viad. Viad owns MoneyGram which is the #2 player in the money wire-transfer business behind First Data's Western Union. Viad also owns Travelers Express (#1 Money Order and Official Check business) and two convention services businesses. At the time we made the swap, Viad was trading for about half of the EBITDA multiple of First Data — a price gap we felt was too large.

Overseas, we initiated a position in Lotte Chilsung Beverage, an innovative consumer products company in Korea. The company produces and markets its own beverage and juice brands, as well as being the Pepsi bottler for Korea. With the local stock market so bombed-out, we were able to buy this terrific little company for under 4x our estimate of 2001 earnings.

Looking Forward

Concern over the markets both in the United States and abroad has been an inexhaustible topic over the past year. As long-term value investors, we rarely predict the short-term direction of the market. However, we believe there are many companies that have already experienced large stock price corrections, providing very attractive future prospects based on underlying business value. We believe stock price valuations are excellent worldwide, and valuations here in the U.S. are especially attractive — better than we've seen for many years. Therefore, as managers of the Fund, we continue to be excited about the portfolio and its future prospects.

Thank you for your continued confidence and support.

Michael J. Welsh, CFA, CPA

Portfolio Manager
102521.2142@compuserve.com

Gregory L. Jackson

Portfolio Manager
gjackson@oakmark.com

January 9, 2001